What is Collision Insurance — How Does it Work?

Collision insurance is a type of auto insurance that pays for damage to your vehicle resulting from a collision, regardless of who is at fault. Unlike third party car insurance, which covers the other party in an accident, collision coverage protects your car directly. Whether it’s another vehicle, a tree, a pole, or a pothole, you’re financially protected.

This type of collision car insurance is often bundled with comprehensive car insurance or bought separately as part of car insurance with collision. It ensures that repairs or replacement costs don’t come out of your pocket after an unexpected crash.

If your car gets damaged in an accident, collision insurance helps cover the repair costs. Here’s how it works:

• It pays for damages if your car hits another vehicle.

• Covers accidents involving objects like poles, walls, or trees.

• Even helps if you hit a pothole or slide on a wet road.

• You pay a fixed amount (deductible), and your insurance covers the rest.

For example, if your repair bill is Rs. 50,000 and your deductible is Rs. 5,000, you pay Rs. 5,000, and the insurance covers the remaining Rs. 45,000. This way, you don’t have to bear the full cost of repairs after an accident.

While both cover physical damage, the key difference lies in how the damage occurred. Here’s a comparison:

Still wondering if collision car insurance is necessary? If your vehicle is leased, financed, or relatively new, the answer is yes. Most lenders will require it. But even if your car is paid off, consider this:

• Can you afford costly repairs after an accident?

• Is your car’s market value high enough to justify coverage?

• Do you frequently drive in congested areas or harsh road conditions?

If you answered “yes” to any of these, car insurance with collision coverage is a smart move to protect your investment. For instance, if your car is worth Rs. 8 lakh and a repair costs Rs.1.5 lakh, having collision coverage means you only pay the deductible, while the insurer covers the rest.

The cost of collision coverage depends on several factors, including your car’s value, driving history, and chosen deductible. Here’s what to expect:

Higher Deductible: Lower Premium (e.g., Rs.1000 deductible will reduce your monthly cost)

Vehicle Value: Expensive vehicles cost more to insure

Driving History: Clean records may fetch discounts.

Location: High-traffic areas may result in higher premiums

Typical cost ranges can vary, but the financial security it offers is often worth the price.

Choosing the right deductible for your collision insurance policy is key to balancing out-of-pocket expenses and monthly premiums.

• Rs.500 Deductible: Higher monthly premium but lower cost at the time of claim.

• Rs.1000+ Deductible: Lower premium, but more to pay during a repair.

Ask yourself: Could you afford a Rs. 1000 repair bill tomorrow? If yes, opt for a higher deductible to save monthly. If not, a lower deductible might be safer. Remember, collision coverage kicks in only after you pay this deductible.

Understanding the differences between collision insurance and other motor insurance types is crucial when choosing the right coverage for your vehicle. Here’s how collision insurance compares with other common options:

Each serves a unique purpose, but collision coverage is essential to protect your car from accidental damage resulting from an impact.

When selecting a car insurance policy, it’s essential to ensure your vehicle is adequately protected in the event of an accident. Tata AIG offers coverage for collision-related damages through its Comprehensive Car Insurance Policy and Standalone Own Damage Car Insurance Policy, helping you manage repair costs smoothly.

Unlike 3rd party car insurance, which covers damages to others, these policies focus on safeguarding your vehicle. With the right coverage and deductible, you can avoid hefty repair expenses and drive with confidence.

If you're renewing your car insurance or buying a new policy, Tata AIG provides reliable options to keep your vehicle secure in unforeseen situations.

Is it better to have collision or comprehensive?

Both serve different purposes. Comprehensive insurance serves as the right choice when you require defense against theft or natural disaster incidents. For accident-related damage, choose collision.

What is the difference between collision and damage?

The term collision identifies harm that develops when a vehicle strikes another object or car during an accident. The term damage includes three main categories, which are theft, fire and natural occurrences.

Which person would most benefit from having collision insurance?

The most substantial benefits from collision insurance go to drivers who possess new cars under financing or leasing ownership because extensive repairs to these vehicles cost very high.

How do deductibles impact collision coverage claims?

When you select higher deductibles, you pay less premium yet face greater expenses when filing a claim. You will pay higher monthly premiums for lower deductibles, which lowers your expenses for necessary car repairs.